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Tunisian president Beji Caid Essebsi |
In December 2010, the events we now call the Arab Spring began in the town of Sidi Bouzid, Tunisia. Beginning with the self-immolation of a young street vendor in protest at his treatment by a municipal officer, the subsequent demonstrations and riots would be felt far beyond that town, leading to regime change in some countries, civil war in others. Looking back, the only place that can claim to have had the peaceful transition to democracy that protesters would have hoped for is the place where it all began: Tunisia.
In December, Tunisia held a presidential election without unrest, following a parliamentary election, also mostly peaceful. So can we call the Arab Spring a success in Tunisia at least? Politically and socially, perhaps, but Tunisia’s economy remains in a dreary state, sluggish and in need of reform. And few things illustrate this more clearly than the banking sector.
“Following the Arab Spring, numerous issues facing the banking system have surfaced,” says Olivier Panic, the lead analyst for Tunisia at Moody’s. He reels off a list. “Weak asset quality, inadequate provisioning, inefficient and under-capitalized public sector banks, inadequate pricing framework, very lengthy and unpredictable banking claim recovery process, and heightened funding and liquidity issues, with banks increasing their reliance on central bank funding.”
